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Build your brand, and they will come

TechCrunch TechCrunch 20/04/2016 Cyril Ebersweiler and Kate Whitcomb


Your hardware startup got some buzz and you beat your crowdfunding target. You’ve lived on planes to set up production, and even been a featured speaker at some hot tech events. At last, you’re ready for the orders to start rolling in!

But then, silence.

When do retailers start calling?

The good news: hardware is hot. The bad news: you’re not selling a VR visor with Facebook, Samsung, HTC or Sony backing you. More bad news: retailers don’t call; you call them. At least the big ones, those who can really drive volume. You might get dozens of enquiries from smaller ones, but serving many geographies with small volumes would be a nightmare.

So, you call the retailers. Or better yet, the sales agent you hired calls retail buyers across the country and sets up in-person meetings with each one. In those meetings, she will pitch your product, mention your thousands of pre-orders, your press coverage, and your 4-and-a-half-star rating on Amazon Launchpad.

Sound daunting to navigate? It is. But to achieve market scale along the lines of GoPro and FitBit, effectively working with big retailers is a necessary part of the process. Despite the growth of online channels, over 90% of the $200B U.S. consumer electronics sales still comes from brick and mortar stores.

The hardware boom has created a glut of market-ready consumer products. This makes it extra hard to land shelf space. All too often, startups who ran a successful crowdfunding focus solely on execution of the campaign for the next 6-12 months. The campaign-generated buzz is often for naught.

Build (your brand) and They Will Come

Successful startups shift focus from product to sales, marketing and branding as soon as their product goes into production. This doesn’t mean assigning engineers to a sales desk! It’s about founders hiring or transitioning themselves and business-focused staff to brand-building and sales operations, and finding key sales partners.

Focus on branding and marketing first. If buyers have heard buzz about your product, they are more likely to say yes. Generate buzz through blog posts, social networks, and paid marketing such as Facebook and AdWords. Build relationships with reporters and attend industry events. These efforts are not only rewarding long-term; they’ll pay off in real time through pre-orders.

Brick-and-mortar retailers often lack specialists to explain products to customers: the “unassisted sale” is a new part of your reality. You are in charge of creating demand. This is another reason to focus on building a recognizable brand; it will be critical in converting customers in-store.

Hire an expert salesperson. Sure, retail buyers love to meet startup founders- but the best person to close the deal is someone who has closed many, many retail deals and knows the ropes.

Find a sales rep or sales agency that specializes in the retailers you are targeting. Leverage your network for these leads. Investors often have a network of qualified, tenured salespeople on tap. It often takes 6-12 months for a product to hit retail shelves, so the sooner your new VP of Sales can hit the phones, the better.

A Tale of Three Startups

A number of brands have popped up on shelves since the dawn of the IoT revolution. Surprise! The winners are rock-star marketers and have built strong sales teams.

Tile, Ring and Prynt did retail right

Tile, is a bluetooth tag to keep track of your belongings. It also built a community to help users find lost items. The market is crowded – TrackR, Cube and Pebblebee all compete for shelf space – but Tile managed to snag premium placement and sell millions of units at Apple, Best Buy and Target.

What was their secret? They used the momentum of their successful 2013 Selfstarter crowdfunding campaign to engage with the backer community and build awareness, even in the face of shipping delays.

They ran holiday campaigns solely based on gifting pre-orders. After shipping, they told hundreds of happy “found item” customer stories. By early 2015, Tile had hired a team of seasoned sales executives to help execute their retail strategy. Simple, explanatory packaging helped convert sales on the shelves. By the close of 2015, Tile was available at every major retailer.

Ring is a connected video doorbell that shows you via smartphone app who’s at your door. Ring hasn’t had an easy road to market; nimble competition (Sky Bell, August), initial product issues and a rebranding in 2015 have all been potential hiccups.

Sure, a $28m investment from Richard Branson doesn’t hurt- but where was the money spent? In part, on a specialized external sales network to address each retail channel and on advertising. Ring was one of the first brands to use TV to educate the American consumer on a connected product. Investing in sales and marketing has paid off; Ring is available in all major retailers, and the company recently closed a $61.2m series C.

Prynt, a photo-printing smartphone case (and HAX portfolio company), has had the hardware world buzzing since running a $1.5m Kickstarter campaign in 2015. The product launched this spring on Amazon, and will be on store shelves near you later this year. How could they be so fast?

Post-campaign, they quickly built a marketing team and secured an external VP of sales with a track record of selling connected products to retail. This focus on sales and marketing early reduced the time gap between fulfilling pre-order units and landing on retail shelves.

All I Want for Christmas Is Your Product on the Shelves

Sure, these startups had airtight product/market fit (which contributed to crowdfunding and fundraising success), but reaching product/retail fit requires deliberate attention. Competition is quick to catch up, customers are fickle, and there is only so much shelf space. To scale, the focus of founders must shift from product creation to demand creation, and sales. If you get this part right, we’ll see you on the shelves next Christmas!

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